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An empirical investigation of the relationship between dividend and price of shares of IT companies in India

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documents in English
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term papers
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4 pages
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  1. Introduction
  2. Broader objectives of the study
  3. Research methodology
  4. Analysis of share price and dividend relationship through T-test
  5. Findinds and suggestions of the study
  6. Limitations of the study
  7. Bibliography
  8. Conclusion

This paper attempts to identify the relationship between the price of shares and dividend policy of companies operating in global competitive world. So researcher has selected the most competitive and fastest growing industry of India which has given India the glory and proud through out the world that is Information Technology (IT) Industry. Indian IT Industry has capitalized its position in the Global IT Market by contributing significantly to Indian GDP and major proportion of Indian Export. The researcher has selected 10 IT- Companies of India for the study purpose. The researcher has collected share prices of sample units for the period of two months ? one month before and one month after declaring dividend for the year. The researcher has collected all the data from capitaline.com and bseindia.com. The researcher has used T-test and one way Analysis of Variance for analysis, interpretation and finding results.

[...] That is, the payment of dividend should be preferred, if it leads to the maximization of shareholders' wealth. If it is not so, the firm should retain the profit and should not distribute dividend. Financial experts have not been unanimous on this issue. Since the principle objective of the firm is to maximize the share price, question arises, what is the relationship between dividend policy and market share price? This is one of the most controversial and unresolved questions, where the empirical evidence is often mixed. [...]


[...] The data has been tabulated as under: Table No Analysis of Variance Share Prices With in Selected Sampled Companies for the study period Weekly Average Prices of Shares i IT p r o The above table indicates the calculation of analysis of variance of weakly average price of shares of sample companies with in sample companies for the study period of two months one month before and one month after declaring dividends by the IT-Companies. H0: There would be no significant difference in share price volatility with in sample units during the study period. [...]

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